Wind Insurance Idea Loses Way In Senate

Published: May 8, 2008

WASHINGTON - The Senate on Wednesday rejected a bid by Gulf state senators to add wind coverage to a financially strapped federal program that provides flood insurance.

Lawmakers from Louisiana and Mississippi cited problems that occurred after Hurricane Katrina and other big 2005 storms when private insurers covering wind damage claimed that destruction to property resulted from flooding, thus shifting the burden of payments to taxpayers.

The Senate voted 73-19 against the amendment by Sen. Roger Wicker, R-Miss., that would have provided optional wind insurance as part of the 40-year old National Flood Insurance Program.

The Senate is debating legislation to bail out and overhaul the program, which expires at the end of September.

The Senate bill would forgive the more than $17 billion the Federal Emergency Management Agency owes the U.S. Treasury and restore fiscal integrity by requiring a larger deductible, requiring more at-risk homeowners to buy insurance, ending subsidies to some vacation homes and businesses, and increasing the allowable annual rate increase from 10 percent to 15 percent.

The flood insurance program, which is run by FEMA, operates in about 20,000 communities that adopt and enforce local floodplain maintenance plans. Now with 5.5 million policyholders, it generally paid its own way through premiums until hit by the catastrophic damage of Katrina.

The House passed its version of the bill in September with a new wind damage provision. It was championed by Rep. Gene Taylor, D-Miss., whose home was destroyed by Katrina. Taylor said his roof ended up 450 feet from his home but the insurance adjustor claimed there was no evidence of wind damage. He later reached a settlement.

"Property owners shouldn't have to go to court to fight over whether it was wind or water that destroyed their home or business," Wicker said.